Ahead of the mid-2022 target for petrol subsidy removal, Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, has revealed that the Federal Government intends to pay a N5,000 monthly stipend to about 30-40 million vulnerable Nigerians to ameliorate the anticipated scorching effect on them and the economy in general.
The minister made the disclosure in Abuja on Tuesday at a conference tagged Nigeria Development Update (NDU), which had in attendance captains of industries and top government officials, including the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mr Mele Kyari.
According to her, hefty subsidy payouts remain an injurious development to the Nigerian economy and Nigerians.
She said trillions of naira which ought to be ploughed into subsidy payments can now go into more strategic economic development programmes.
She expressed optimism that the recent developments in the oil sector, such as the Petroleum Industry Act (PIA) 2021 and the full reactivation of the four public refineries in the country, and the completion and coming on stream of the three private refineries under construction in 2022, would significantly boost contribution from the sector to our economic growth efforts.
‘The subsidies regime in the sector remains unsustainable and economically disingenuous. Ahead of the target date of mid-2022 for the complete elimination of fuel subsidies, we are working with our partners on measures to cushion the potential negative impact of the removal of the subsidies on the most vulnerable at the bottom 40% of the population. One of such measures would be to institute a monthly transport subsidy in the form of a cash transfer of N5,000 to between 30 – 40 million deserving Nigerians.
‘As a government, we remain committed to our broad objectives of stimulating broad-based growth through diversification and the active participation of the private sector to ensure that our growth is inclusive. We will continue to prioritise investment in critical infrastructure needed to unlock production and supply constraints, create adequate productive employment and preserve jobs, and ensure macroeconomic stability and promote poverty reduction and equity.
‘I agree with the report that with the expansion of social protection policies during the pandemic, the government has an opportunity to phase out subsidies such as the PMS subsidy while utilising cash transfers to safeguard the welfare of poor and middle-class households. Towards this end, we intend to accelerate our structural reforms, particularly in the power sector, in governance, in the business environment to unlock the huge potential of the economy, scale up the social safety net and deepen financial inclusion to reduce poverty and inequality gaps. We will carefully calibrate the sequencing of these reforms to manage their attendant political fallout,’ she explained.
The minister hailed the efforts of the World Bank Group on Nigeria’s Development Update which the group releases every six months.
‘We appreciate the candid assessment and outlook that the Report offers and welcome this level of public interaction to discuss the broader findings of the report as they relate to our economic transformation and growth agenda. The Report has widely acknowledged how the Nigerian economy has been resilient in the face of multiple shocks triggered by the COVID-19 pandemic. Notwithstanding, our economic prospects continue to improve with a forecast to continue to witness steady growth beyond 2022. We are closely monitoring economic indicators including inflation trends which currently reflect rising food prices and the unemployment rate,’ she added.
Ahmed also spoke on the digital revolution, saying that Nigeria’s digital economy can transform economic activities by unleashing new productivity gains, offering new services, and improving the government’s efficiency.
‘We see enormous opportunity for our teeming youth population in this sector which has largely remained unharnessed with isolated progress and possibilities. We need greater investments in newer and competitive technologies to be made for the provision of critical infrastructure in the telecoms sector to unleash potential.
‘To protect such investments, the government has been mobilising national security outfits, and even local “vigilantes” to provide added layers of security for the infrastructure, while at the same time engaging local communities towards addressing the likely root causes of cases of infrastructure vandalisation,’ the minister noted.
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